EXHIBIT 99.04
DELAWARE CODE ANNOTATED
TITLE 12. DECEDENTS' ESTATES AND FIDUCIARY RELATIONS
PART V. FIDUCIARY RELATIONS
CHAPTER 38. TREATMENT OF DELAWARE BUSINESS TRUSTS
s 3801 Definitions.
(a) "Business trust" means an unincorporated association which (i) is
created by a trust instrument under which property is or will be held, managed,
administered, controlled, invested, reinvested and/or operated, or business or
professional activities for profit are carried on or will be carried on, by a
trustee or trustees for the benefit of such person or persons as are or may
become entitled to a beneficial interest in the trust property, including but
not limited to a trust of the type known at common law as a "business trust," or
"Massachusetts trust," or a trust qualifying as a real estate investment trust
under s 856 et seq., of the United States Internal Revenue Code of 1986 [26
U.S.C. s 856 et seq.], as amended, or under any successor provision, or a trust
qualifying as a real estate mortgage investment conduit under s 860D of the
United States Internal Revenue Code of 1986 [26 U.S.C. s 860D], as amended, or
under any successor provision, and (ii) files a certificate of trust pursuant to
s 3810 of this title. Any such association heretofore or hereafter organized
shall be a business trust and a separate legal entity. A business trust may be
organized to carry on any lawful business or activity, whether or not conducted
for profit, and/or for any of the purposes referred to in clause (i) of this
subsection (including, without limitation, for the purpose of holding or
otherwise taking title to property, whether in an active or custodial capacity).
(b) "Beneficial owner" means any owner of a beneficial interest in a
business trust, the fact of ownership to be determined and evidenced (whether by
means of registration, the issuance of certificates or otherwise) in conformity
to the applicable provisions of the governing instrument of the business trust.
(c) "Trustee" means the person or persons appointed as a trustee in
accordance with the governing instrument of a business trust, and may include
the beneficial owners or any of them.
(d) "Person" means a natural person, partnership, limited partnership,
trust, estate, association, corporation, custodian, nominee or any other
individual or entity in its own or any representative capacity.
(e) "Other business entity" means a corporation, a partnership (whether
general or limited), a common-law trust or any other unincorporated business,
excluding a business trust.
(f) "Governing instrument" means a trust instrument which creates a
business trust and provides for the governance of the affairs of the business
trust and the conduct of its business. A governing instrument:
(1) May provide that a person shall become a beneficial owner and
shall become bound by the governing instrument if such person (or a
representative authorized by such person orally, in writing or by other action
such as payment for a beneficial interest) complies with the conditions for
becoming a beneficial owner set forth in the governing instrument or any other
writing and acquires a beneficial interest; and
(2) May consist of 1 or more agreements, instruments or other writings
and may include or incorporate bylaws containing provisions relating to the
business of the business trust, the conduct of its affairs and its rights or
powers or the rights or powers of its trustees, beneficial owners, agents or
employees.
s 3802 Contributions by beneficial owners.
(a) A contribution of a beneficial owner to the business trust may be in
cash, property or services rendered, or a promissory note or other obligation to
contribute cash or property or to perform services; provided however, that a
person may become a beneficial owner of a business trust and may receive a
beneficial interest in a business trust without making a contribution or being
obligated to make a contribution to the business trust.
(b) Except as provided in the governing instrument, a beneficial owner is
obligated to the business trust to perform any promise to contribute cash,
property or to perform services, even if the beneficial owner is unable to
perform because of death, disability or any other reason. If a beneficial owner
does not make the required contribution of property or services, the beneficial
owner is obligated at the option of the business trust to contribute cash equal
to that portion of the agreed value (as stated in the records of the business
trust) of the contribution that has not been made. The foregoing option shall
be in addition to, and not in lieu of, any other rights, including the right
to specific
performance, that the business trust may have against such beneficial owner
under the governing instrument of applicable law.
(c) A governing instrument may provide that the interest of any beneficial
owner who fails to make any contribution that the beneficial owner is obligated
to make shall be subject to specific penalties for, or specified consequences
of, such failure. Such penalty or consequence may take the form of reducing or
eliminating the defaulting beneficial owner's proportionate interest in the
business trust, subordinating the beneficial interest to that of nondefaulting
beneficial owners, a forced sale of the beneficial interest, forfeiture of the
beneficial interest, the lending by other beneficial owners of the amount
necessary to meet the beneficiary's commitment, a fixing of the value of the
defaulting beneficial owner's beneficial interest by appraisal or by formula and
redemption or sale of the beneficial interest at such value, or any other
penalty or consequence.
s 3803 Liability of beneficial owners and trustees.
(a) Except to the extent otherwise provided in the governing instrument of
the business trust, the beneficial owners shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the general corporation law of the
State.
(b) Except to the extent otherwise provided in the governing instrument of
a business trust, a trustee, when acting in such capacity, shall not be
personally liable to any person other than the business trust or a beneficial
owner for any act, omission or obligation of the business trust or any trustee
thereof.
(c) Except to the extent otherwise provided in the governing instrument of
a business trust, an officer, employee, manager or other person acting pursuant
to s 3806(b)(7) of this title, when acting in such capacity, shall not be
personally liable to any person other than the business trust or a beneficial
owner for any act, omission or obligation of the business trust or any trustee
thereof.
s 3804 Legal proceedings.
(a) A business trust may sue and be sued, and service of process upon 1 of
the trustees shall be sufficient. In furtherance of the foregoing, a business
trust may be sued for debts and other obligations or liabilities contracted or
incurred by the trustees, or by the duly authorized agents of such trustees, in
the performance of their respective duties under the governing instrument of the
business trust, and for any damages to persons or property resulting from the
negligence of such trustees or agents acting in the performance of such
respective duties. The property of a business trust shall be subject to
attachment and execution as if it were a corporation, subject to s 3502 of Title
10. Notwithstanding the foregoing provisions of this section, in the event that
the governing instrument of a business trust, including a business trust which
is a registered investment company under the Investment Company Act of 1940, as
amended (15 U.S.C. s 80a-1 et seq.), creates 1 or more series as provided in s
3806(b)(2) of this title, and if separate and distinct records are maintained
for any such series and the assets associated with any such series are held and
accounted for separately from the other assets of the business trust, or any
other series thereof, and if the governing instrument so provides, and notice of
the limitation on liabilities of a series as referenced in this sentence is set
forth in the certificate of trust of the business trust, then the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets of such series only, and not against the assets of the business trust
generally.
(b) A trustee of a business trust may be served with process in the manner
prescribed in subsection (c) of this section in all civil actions or proceedings
brought in the State involving or relating to the activities of the business
trust or a violation by a trustee of a duty to the business trust, or any
beneficial owner, whether or not the trustee is a trustee at the time suit is
commenced. Every resident or nonresident of the State who accepts election or
appointment or serves as a trustee of a business trust shall, by such acceptance
or service, be deemed thereby to have consented to the appointment of the
Delaware trustee or registered agent of such business trust required by s 3807
of this title (or, if there is none, the Secretary of State) as such person's
agent upon whom service of process may be made as provided in this section.
Such acceptance or service shall signify the consent of such trustee that any
process when so served shall be of the same legal force and validity as if
served upon such trustee within the State and such appointment of such Delaware
trustee or registered agent (or, if there is none, the Secretary of State) shall
be irrevocable.
(c) Service of process shall be effected by serving the Delaware trustee or
registered agent of such business trust required by s 3807 of this title (or, if
there is none, the Secretary of State) with 1 copy of such process in the
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manner provided by law for service of writs of summons. In the event service
is made under this subsection upon the Secretary of State, the plaintiff
shall pay to the Secretary of State the sum of $50 for the use of the State,
which sum shall be taxed as part of the costs of the proceeding if the
plaintiff shall prevail therein. In addition, the Prothonotary or the
Register in Chancery of the court in which the civil action or proceeding is
pending shall, within 7 days of such service, deposit in the United States
mails, by registered mail, postage prepaid, true and attested copies of the
process, together with a statement that service is being made pursuant to
this section, addressed to the defendant at the defendant's address last
known to and furnished by the party desiring to make such service.
(d) In any action in which any such trustee has been served with process as
hereinafter provided, the time in which a defendant shall be required to appear
and file a responsive pleading shall be computed from the date of mailing by the
Prothonotary or the Register in Chancery as provided in subsection (c) of this
section; provided however, the court in which such action has been commenced may
order such continuance or continuances as may be necessary to afford such
trustee reasonable opportunity to defend the action.
(e) In the governing instrument of the business trust or other writing, a
trustee may consent to be subject to the nonexclusive jurisdiction of the courts
of, or arbitration in, a specified jurisdiction, or the exclusive jurisdiction
of the courts of, or the exclusivity of arbitration in, the State, and to be
served with legal process in the manner prescribed in such governing instrument
of the business trust or other writing.
(f) Nothing herein contained limits or affects the right to serve process
in any other manner now or hereafter provided by law. This section is an
extension of and not a limitation upon the right otherwise existing of service
of legal process upon nonresidents.
(g) The Court of Chancery and the Superior Court may make all necessary
rules respecting the form of process, the manner of issuance and return thereof
and such other rules which may be necessary to implement this section and are
not inconsistent with this section.
(h) A partnership (whether general or limited), corporation or other
nonnatural person formed or organized under the laws of any foreign country or
other foreign jurisdiction or the laws of any state other than the State of
Delaware shall not be deemed to be doing business in the State solely by reason
of its being a trustee of a business trust.
s 3805 Rights of beneficial owners in trust property.
(a) Except to the extent otherwise provided in the governing instrument of
the business trust, a beneficial owner shall have an undivided beneficial
interest in the property of the business trust and shall share in the profits
and losses of the business trust in the proportion (expressed as a percentage)
of the entire undivided beneficial interest in the business trust owned by such
beneficial owner. The governing instrument of a business trust may provide that
the business trust or the trustees, acting for and on behalf of the business
trust, shall be deemed to hold beneficial ownership of any income earned on
securities of the business trust issued by any business entities formed,
organized, or existing under the laws of any jurisdiction, including the laws of
any foreign country.
(b) No creditor of the beneficial owner shall have any right to obtain
possession of, or otherwise exercise legal or equitable remedies with respect
to, the property of the business trust.
(c) A beneficial owner's beneficial interest in the business trust is
personal property notwithstanding the nature of the property of the trust.
Except to the extent otherwise provided in the governing instrument of a
business trust, a beneficial owner has no interest in specific business trust
property.
(d) A beneficial owner's beneficial interest in the business trust is
freely transferable except to the extent otherwise provided in the governing
instrument of the business trust.
(e) Except to the extent otherwise provided in the governing instrument of
a business trust, at the time a beneficial owner becomes entitled to receive a
distribution, the beneficial owner has the status of, and is entitled to all
remedies available to, a creditor of the business trust with respect to the
distribution. A governing instrument may provide for the establishment of
record dates with respect to allocations and distributions by a business trust.
s 3806 Management of business trust.
(a) Except to the extent otherwise provided in the governing instrument
of a business trust, the business and affairs of a business trust shall be
managed by or under the direction of its trustees. To the extent provided in
the governing instrument of a business trust, any person (including a
beneficial owner) shall be entitled to direct the trustees or other persons
in the management of the business trust. Except to the extent otherwise
provided in the governing
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instrument of a business trust, neither the power to give direction to a
trustee or other persons nor the exercise thereof by any person (including a
beneficial owner) shall cause such person to be a trustee.
(b) A governing instrument may contain any provision relating to the
management of the business and affairs of the business trust, and the rights,
duties and obligations of the trustees, beneficial owners and other persons,
which is not contrary to any provision or requirement of this chapter and,
without limitation:
(1) May provide for classes, groups or series of trustees or
beneficial owners, or classes, groups or series of beneficial interests, having
such relative rights, powers and duties as the governing instrument may provide,
and may make provision for the future creation in the manner provided in the
governing instrument of additional classes, groups or series of trustees,
beneficial owners or beneficial interests, having such relative rights, powers
and duties as may from time to time be established, including rights, powers and
duties senior or subordinate to existing classes, groups or series of trustees,
beneficial owners or beneficial interests;
(2) May establish or provide for the establishment of designated
series of trustees, beneficial owners or beneficial interests having separate
rights, powers or duties with respect to specified property or obligations of
the business trust or profits and losses associated with specified property or
obligations, and, to the extent provided in the governing instrument, any such
series may have a separate business purpose or investment objective;
(3) May provide for the taking of any action, including the amendment
of the governing instrument, the accomplishment of a merger or consolidation,
the appointment of one or more trustees, the sale, lease, exchange, transfer,
pledge or other disposition of all or any part of the assets of the business
trust or the assets of any series, or the dissolution of the business trust, or
may provide for the taking of any action to create under the provisions of the
governing instrument a class, group or series of beneficial interests that was
not previously outstanding, in any such case without the vote or approval of any
particular trustee or beneficial owner, or class, group or series of trustees or
beneficial owners;
(4) May grant to (or withhold from) all or certain trustees or
beneficial owners, or a specified class, group or series of trustees or
beneficial owners, the right to vote, separately or with any or all other
classes, groups or series of the trustees or beneficial owners, on any matter,
such voting being on a per capita, number, financial interest, class, group,
series or any other basis;
(5) May, if and to the extent that voting rights are granted under the
governing instrument, set forth provisions relating to notice of the time, place
or purpose of any meeting at which any matter is to be voted on, waiver of any
such notice, action by consent without a meeting, the establishment of record
dates, quorum requirements, voting in person, by proxy or in any other manner,
or any other matter with respect to the exercise of any such right to vote;
(6) May provide for the present or future creation of more than 1
business trust, including the creation of a future business trust to which all
or any part of the assets, liabilities, profits or losses of any existing
business trust will be transferred, and for the conversion of beneficial
interests in an existing business trust, or series thereof, into beneficial
interests in the separate business trust, or series thereof; or
(7) May provide for the appointment, election or engagement, either as
agents or independent contractors of the business trust or as delegatees of the
trustees, of officers, employees, managers or other persons who may manage the
business and affairs of the business trust and may have such titles and such
relative rights, powers and duties as the governing instrument shall provide.
Except to the extent otherwise provided in the governing instrument of a
business trust, the trustees shall choose and supervise such officers, managers,
employees and other persons.
(c) To the extent that, at law or in equity, a trustee has duties
(including fiduciary duties) and liabilities relating thereto to a business
trust or to a beneficial owner:
(1) Any such trustee acting under a governing instrument shall not be
liable to the business trust or to any such beneficial owner for the trustee's
good faith reliance on the provisions of such governing instrument; and
(2) The trustee's duties and liabilities may be expanded or restricted
by provisions in a governing instrument.
(d) To the extent that, at law or in equity, an officer, employee, manager
or other person designated pursuant to subsection (b)(7) of this section has
duties (including fiduciary duties) and liabilities relating thereto to a
business trust, a beneficial owner or a trustee:
(1) Any such officer, employee, manager or other person acting under a
governing instrument shall not be liable to the business trust, any beneficial
owner or any trustee for such person's good faith reliance on the provisions of
such governing instrument; and
(2) The duties and liabilities of an officer, employee, manager or
other person acting pursuant to subsection (b)(7) of this section may be
expanded or restricted by provisions in a governing instrument.
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s 3807 Trustee in State.
(a) Every business trust shall at all times have at least 1 trustee which,
in the case of a natural person, shall be a person who is a resident of this
State or which, in all other cases, has its principal place of business in this
State.
(b) Notwithstanding the provisions of subsection (a) of this section, if a
business trust is, becomes, or will become prior to or within 180 days following
the first issuance of beneficial interests, a registered investment company
under the Investment Company Act of 1940, as amended (15 U.S.C. ss 80a- 1 et
seq.), such business trust shall not be required to have a trustee who is a
resident of this State or who has a principal place of business in this State if
and for so long as such business trust shall have and maintain in this State:
(1) A registered office, which may but need not be a place of business
in this State; and
(2) A registered agent for service of process on the business trust,
which agent may be either an individual resident in this State whose business
office is identical with such business trust's registered office, or a domestic
corporation, or a foreign corporation authorized to transact business in this
State, having a business office identical with such registered office.
(c) Any business trust maintaining a registered office and registered agent
in this State under subsection (b) of this section may change the location of
its registered office in this State to any other place in this State, or may
change the registered agent to any other person or corporation (meeting the
requirements contained in subsection (b) of this section), by filing an
amendment to its certificate of trust in accordance with the applicable
provisions of this chapter. If a business trust which is an investment company
registered as aforesaid maintains a registered office and registered agent in
this State as herein provided, then the reference in s 3810(a)(1)b. of this
title to the "name and the business address of at least 1 of the trustees
meeting the requirements of s 3807 of this title" shall be deemed a reference to
the name and the business address of the registered agent and registered office
maintained under this section, and the certificate of trust filed under s 3810
of this title shall reflect such information in lieu of the information
otherwise required by s 3810(a)(1)b. of this title.
(d) Service of process upon a registered agent maintained by a business
trust pursuant to subsection (b) of this section shall be as effective as if
served upon one of the trustees of the business trust pursuant to s 3804 of this
title.
s 3808 Existence of business trust.
(a) Except to the extent otherwise provided in the governing instrument of
the business trust, a business trust shall have perpetual existence, and a
business trust may not be terminated or revoked by a beneficial owner or other
person except in accordance with the terms of its governing instrument.
(b) Except to the extent otherwise provided in the governing instrument of
a business trust, the death, incapacity, dissolution, termination or bankruptcy
of a beneficial owner shall not result in the termination or dissolution of a
business trust.
s 3809 Applicability of trust law.
Except to the extent otherwise provided in the governing instrument of a
business trust or in this chapter, the laws of this State pertaining to trusts
are hereby made applicable to business trusts; provided however, that for
purposes of taxation under Title 30 a business trust shall be classified as a
corporation, an association, a partnership, a trust or otherwise, as shall be
determined under the United States Internal Revenue Code of 1986, as amended, or
under any successor provision.
s 3810 Certificate of trust; amendment; restatement; cancellation.
(a)(1) Every business trust shall file a certificate of trust in the office
of the Secretary of State. The certificate of trust shall set forth:
a. The name of the business trust;
b. The name and the business address of at least 1 of the
trustees meeting the requirements of s 3807 of this title;
c. The future effective date or time (which shall be a date or
time certain) of effectiveness of the certificate if it is not to be effective
upon the filing of the certificate; and
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d. Any other information the trustees determine to include
therein.
(2) The filing of a certificate of trust in the office of the
Secretary of State shall make it unnecessary to file any other documents under
Chapter 31 of Title 6.
(b)(1) A certificate of trust may be amended by filing a certificate of
amendment thereto in the office of the Secretary of State. The certificate of
amendment shall set forth:
a. The name of the business trust;
b. The amendment to the certificate; and
c. The future effective date or time (which shall be a date or
time certain) of effectiveness of the certificate if it is not to be effective
upon the filing of the certificate.
(2) A certificate of trust may be amended at any time for any purpose
as the trustees may determine. A trustee who becomes aware that any statement
in a certificate of trust was false when made or that any matter described has
changed making the certificate false in any material respect shall promptly file
a certificate of amendment.
(c)(1) A certificate of trust may be restated by integrating into a single
instrument all of the provisions of the certificate of trust which are then in
effect and operative as a result of there having been theretofore filed 1 or
more certificates of amendment pursuant to subsection (b) of this section, and
the certificate of trust may be amended or further amended by the filing of a
restated certificate of trust. The restated certificate of trust shall be
specifically designated as such in its heading and shall set forth:
a. The present name of the business trust, and if it has been
changed, the name under which the business trust was originally formed;
b. The date of filing of the original certificate of trust with
the Secretary of State;
c. The information required to be included pursuant to subsection
(a) of this section; and
d. Any other information the trustees determine to include
therein.
(2) A certificate of trust may be restated at any time for any purpose
as the trustees may determine. A trustee who becomes aware that any statement
in a restated certificate of trust was false when made or that any matter
described has changed making the restated certificate false in any material
respect shall promptly file a certificate of amendment or a restated certificate
of trust.
(d) A certificate of trust shall be cancelled upon the completion of
winding up of the business trust and its termination. A certificate of
cancellation shall be filed in the office of the Secretary of State and set
forth:
(1) The name of the business trust;
(2) The date of filing of its certificate of trust;
(3) The future effective date or time (which shall be a date or time
certain) of cancellation if it is not to be effective upon the filing of the
certificate; and
(4) Any other information the trustee determines to include therein.
s 3811 Execution of certificate.
(a) Each certificate required by this chapter to be filed in the office of
the Secretary of State shall be executed in the following manner:
(1) A certificate of trust must be signed by all of the trustees;
(2) A certificate of amendment must be signed by at least one of the
trustees;
(3) A certificate of cancellation must be signed by all of the
trustees or as otherwise provided in the governing instrument of the business
trust; and
(4) If a business trust is filing a certificate of merger or
consolidation, the certificate of merger or consolidation must be signed by all
of the trustees or as otherwise provided in the governing instrument of the
business trust, or if the certificate of merger or consolidation is being filed
by another business entity, the certificate of merger or consolidation must be
signed by a person authorized to execute such instrument on behalf of such other
business entity.
(b) The execution of a certificate by a trustee constitutes an oath or
affirmation, under the penalties of perjury in the third degree, that, to the
best of the trustee's knowledge and belief, the facts stated therein are true.
s 3812 Filing of certificate.
(a) The original signed copy, together with a duplicate copy, which may be
either a signed or conformed copy, of the certificate of trust and any
certificates of amendment or cancellation or any certificate of merger or
consolidation
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shall be delivered to the Office of the Secretary of State. Unless
the Secretary of State finds that any certificate does not conform to law, upon
receipt of all filing fees required by law the Secretary shall:
(1) Certify that the certificate of trust, the certificate of
amendment, the certificate of cancellation or the certificate of merger or
consolidation has been filed in the Secretary's office by endorsing upon the
original certificate the word "Filed", and the date and hour of the filing. This
endorsement is conclusive of the date and time of its filing in the absence of
actual fraud;
(2) File and index the endorsed certificate; and
(3) Return the duplicate copy, similarly endorsed, to the person who
filed it or person's representative.
(b) Upon the filing of a certificate of trust in the Office of the
Secretary of State, or upon the future effective date or time of a certificate
of trust as provided for therein, the certificate of trust shall be effective.
Upon the filing of a certificate of amendment in the office of the Secretary of
State, or upon the future effective date or time of a certificate of amendment
as provided for therein, the certificate of trust shall be amended as set forth
therein. Upon the filing of a certificate of cancellation or a certificate of
merger or consolidation which acts as a certificate of cancellation in the
office of the Secretary of State or upon the future effective date or time of a
certificate of cancellation or a certificate of merger or consolidation which
acts as a certificate of cancellation, as provided for therein, the certificate
of trust shall be cancelled.
(c) A fee as set forth in s 3813(a)(2) of this title shall be paid at the
time of the filing of a certificate of trust, a certificate of amendment, a
certificate of cancellation or a certificate of merger or consolidation.
(d) A fee as set forth in s 3813(a)(3) of this title shall be paid for a
certified copy of any paper on file as provided for by this chapter, and a fee
as set forth in s 3813(a)(4) of this title shall be paid for each page copied.
(e) Any signature on any certificate authorized to be filed with the
Secretary of State under any provision of this chapter may be a facsimile. Any
such certificate may be filed by telecopy, fax or similar electronic
transmission; provided however, that the Secretary of State shall have no
obligation to accept such filing if such certificate is illegible or otherwise
unsuitable for processing.
s 3813 Fees.
(a) No documents required to be filed under this chapter shall be effective
until the applicable fee required by this section is paid. The following fees
shall be paid to and collected by the Secretary of State for the use of this
State:
(1) Upon the receipt for filing of an application for reservation of
name, and application for renewal of reservation, or notice of transfer or
cancellation of reservation pursuant to s 3814 of this title, a fee in the
amount of $50.
(2) Upon the receipt for filing of a certificate of trust, a
certificate of amendment, a certificate of cancellation or a certificate of
merger or consolidation, a fee in the amount of $100.
(3) For certifying copies of any paper on file as provided for by this
chapter, a fee in the amount of $10 for each copy certified.
(4) For issuing further copies of instruments on file, whether
certified or not, a fee in the amount of $1 per page.
(b) In addition to those fees charged under subsection (a) of this section,
there shall be collected by and paid to the Secretary of State the following:
(1) For all services described in subsection (a) of this section that
are requested to be completed within the same day as the day of the request, an
additional sum of up to $200; and
(2) For all services described in subsection (a) of this section that
are requested to be completed within a 24-hour period from the time of the
request, an additional sum of up to $100.
The Secretary of State shall establish (and may from time to time alter or
amend) a schedule of specific fees payable pursuant to this subsection.
(c) Except as provided by this section, all other fees for the Secretary of
State shall be as provided for in s 2315 of Title 29.
s 3814 Use of names regulated.
(a) The name of each business trust as set forth in its certificate of
trust must be such as to distinguish it upon the records of the office of the
Secretary of State from the name of any corporation, limited partnership,
business trust or limited liability company reserved, registered, formed or
organized under the laws of this State or qualified to do
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business or registered as a foreign corporation, foreign limited partnership
or foreign limited liability company in this State; provided however, that a
business trust may register under any name which is not such as to
distinguish it upon the records of the office of the Secretary of State from
the name of any domestic or foreign corporation, limited partnership,
business trust or limited liability company reserved, registered, formed or
organized under the laws of this State with the written consent of the other
corporation, limited partnership, business trust or limited liability
company, which written consent shall be filed with the Secretary of State.
(b) The name of each business trust as set forth in its certificate of
trust may contain the name of a beneficial owner, a trustee or any other person.
(c) The name of each business trust, as set forth in its certificate of
trust, may contain the following words: "company," "association," "club,"
"foundation," "fund," "institute," "society," "union," "syndicate," "limited" or
"trust" (or abbreviations of like import).
(d) The exclusive right to the use of a name may be reserved by:
(1) Any person intending to form a business trust and to adopt that
name; and
(2) Any business trust registered in this State which proposes to
change its name.
(e) The reservation of a specified name shall be made by filing with the
Secretary of State an application, executed by the applicant, together with a
duplicate copy, which may either be a signed or conformed copy, specifying the
name to be reserved and the name and address of the applicant. If the Secretary
of State finds that the name is available for use by a business trust, the
Secretary shall reserve the name for the exclusive use of the applicant for a
period of 120 days. Once having so reserved a name, the same applicant may
again reserve the same name for successive 120-day periods. The right to the
exclusive use of a reserved name may be transferred to any other person by
filing in the office of the Secretary of State a notice of the transfer,
executed by the applicant for whom the name was reserved, together with a
duplicate copy, which may be either a signed or conformed copy, specifying the
name to be transferred and the name and address of the transferee. The
reservation of a specified name may be cancelled by filing with the Secretary of
State a notice of cancellation, executed by the applicant or transferee,
together with a duplicate copy, which may be either a signed or conformed copy,
specifying the name reservation to be cancelled and the name and address of the
applicant or transferee. Any duplicate copy filed with the Secretary of State,
as required by this subsection, shall be returned by the Secretary of State to
the person who filed it or that person's representative with a notation thereon
of the action taken with respect to the original copy thereof by the Secretary
of State.
(f) Fees as set forth in s 3813 of this title shall be paid at the time of
the initial reservation of any name, at the time of the renewal of any such
reservation and at the time of the filing of a notice of the transfer or
cancellation of any such reservation.
s 3815 Merger and consolidation.
(a) Pursuant to an agreement of merger or consolidation, a business trust
may merge or consolidate with or into 1 or more business trusts or other
business entities formed or organized or existing under the laws of the State or
any other state or the United States or any foreign country or other foreign
jurisdiction, with such business trust or other business entity as the agreement
shall provide being the surviving or resulting business trust or other business
entity. Unless otherwise provided in the governing instrument of a business
trust, a merger or consolidation shall be approved by each business trust which
is to merge or consolidate by all of the trustees and the beneficial owners of
such business trust. In connection with a merger or consolidation hereunder,
rights or securities of, or interests in, a business trust or other business
entity which is a constituent party to the merger or consolidation may be
exchanged for or converted into cash, property, rights or securities of, or
interests in, the surviving or resulting business trust or other business entity
or, in addition to or in lieu thereof, may be exchanged for or converted into
cash, property, rights or securities of, or interests in, a business trust or
other business entity which is not the surviving or resulting business trust or
other business entity in the merger or consolidation. Notwithstanding prior
approval, an agreement of merger or consolidation may be terminated or amended
pursuant to a provision for such termination or amendment contained in the
agreement of merger or consolidation.
(b) If a business trust is merging or consolidating under this section, the
business trust or other business entity surviving or resulting in or from the
merger or consolidation shall file a certificate of merger or consolidation in
the office of the Secretary of State. The certificate of merger or
consolidation shall state:
(1) The name and jurisdiction of formation or organization of each of
the business trust or other business entities which is to merge or consolidate;
8
(2) That an agreement of merger or consolidation has been approved and
executed by each of the business trusts or other business entities which is to
merge or consolidate;
(3) The name of the surviving or resulting business trust or other
business entity;
(4) The future effective date or time (which shall be a date or time
certain) of the merger or consolidation if it is not to be effective upon the
filing of the certificate of merger or consolidation;
(5) That the executed agreement of merger or consolidation is on file
at the principal place of business of the surviving or resulting business trust
or other business entity, and shall state the address thereof;
(6) That a copy of the agreement of merger or consolidation will be
furnished by the surviving or resulting business trust or other business entity,
on request and without cost, to any beneficial owner of any business trust or
any person holding an interest in any other business entity which is to merge or
consolidate; and
(7) If the surviving or resulting entity is not a business trust or
other business entity formed or organized or existing under the laws of the
State of Delaware, a statement that such surviving or resulting other business
entity agrees that it may be served with process in the State in any action,
suit or proceeding for the enforcement of any obligation of any business trust
which is to merge or consolidate, irrevocably appointing the Secretary of State
as its agent to accept service of process in any such action, suit or proceeding
and specifying the address to which a copy of such process shall be mailed to it
by the Secretary of State. In the event of service hereunder upon the Secretary
of State, the plaintiff in any such action, suit or proceeding shall furnish the
Secretary of State with the address specified in the certificate of merger or
consolidation provided for in this section and any other address which the
plaintiff may elect to furnish, together with copies of such process as required
by the Secretary of State, and the Secretary of State shall notify such
surviving or resulting other business entity thereof at all such addresses
furnished by the plaintiff by letter, certified mail, return receipt requested.
Such letter shall enclose a copy of the process and any other papers served upon
the Secretary of State. It shall be the duty of the plaintiff in the event of
such service to serve process and any other papers in duplicate, to notify the
Secretary of State that service is being made pursuant to this subsection, and
to pay the Secretary of State the sum of $50 for use of the State, which sum
shall be taxed as part of the costs in the proceeding, if the plaintiff shall
prevail therein. The Secretary of State shall maintain an alphabetical record of
any such process setting forth the name of the plaintiff and defendant, the
title, docket number and nature of the proceedings in which process has been
served upon the Secretary, the return date thereof, and the day and hour when
the service was made. The Secretary of State shall not be required to retain
such information for a period longer than 5 years from the Secretary's receipt
of the service of process.
(c) Any failure to file a certificate of merger or consolidation in
connection with a merger or consolidation which was effective prior to July 5,
1990 shall not affect the validity or effectiveness of any such merger or
consolidation.
(d) Unless a future effective date or time is provided in a certificate of
merger or consolidation, in which event a merger or consolidation shall be
effective at any such future effective date or time, a merger or consolidation
shall be effective upon the filing in the office of the Secretary of State of a
certificate of merger or consolidation.
(e) A certificate of merger or consolidation shall act as a certificate of
cancellation for a business trust which is not the surviving or resulting entity
in the merger or consolidation.
(f) Notwithstanding anything to the contrary contained in the governing
instrument of a business trust, a governing instrument of a business trust
containing a specific reference to this subsection may provide that an agreement
of merger or consolidation approved in accordance with subsection (a) of this
section may:
(1) Effect any amendment to the governing instrument of the business
trust; or
(2) Effect the adoption of a new governing instrument of the business
trust if it is the surviving or resulting business trust in the merger or
consolidation.
Any amendment to the governing instrument of a business trust or adoption of a
new governing instrument of the business trust made pursuant to the foregoing
sentence shall be effective at the effective time or date of the merger or
consolidation. The provisions of this subsection shall not be construed to
limit the accomplishment of a merger or consolidation or of any of the matters
referred to herein by any other means provided for in the governing instrument
of a business trust or other agreement or as otherwise permitted by law,
including that the governing instrument of any constituent business trust to the
merger or consolidation (including a business trust formed for the purpose of
consummating a merger or consolidation) shall be the governing instrument of the
surviving or resulting business trust.
(g) When any merger or consolidation shall have become effective under this
section, for all purposes of the laws of the State, all of the rights,
privileges and powers of each of the business trusts and other business entities
that have merged or consolidated, and all property, real, personal and mixed,
and all debts due to any of said business trusts
9
and other business entities, as well as all other things and causes of action
belonging to each of such business trusts and other business entities, shall
be vested in the surviving or resulting business trust or other business
entity, and shall thereafter be the property of the surviving or resulting
business trust or other business entity as they were of each of the business
trusts and other business entities that have merged or consolidated, and the
title to any real property vested by deed or otherwise, under the laws of the
State, in any of such business trusts and other business entities, shall not
revert or be in any way impaired by reason of this chapter; but all rights of
creditors and all liens upon any property of any of said business trusts and
other business entities shall be preserved unimpaired, and all debts,
liabilities and duties of each of the said business trusts and other business
entities that have merged or consolidated shall thenceforth attach to the
surviving or resulting business trust or other business entity, and may be
enforced against it to the same extent as if said debts, liabilities and
duties had been incurred or contracted by it.
s 3816 Derivative actions.
(a) A beneficial owner may bring an action in the Court of Chancery in the
right of a business trust to recover a judgment in its favor if trustees with
authority to do so have refused to bring the action or if an effort to cause
those trustees to bring the action is not likely to succeed.
(b) In a derivative action, the plaintiff must be a beneficial owner at the
time of bringing the action and:
(1) At the time of the transaction of which the plaintiff complains;
or
(2) Plaintiff's status as a beneficial owner had devolved upon
plaintiff by operation of law or pursuant to the terms of the governing
instrument of the business trust from a person who was a beneficial owner at the
time of the transaction.
(c) In a derivative action, the complaint shall set forth with
particularity the effort, if any, of the plaintiff to secure initiation of the
action by the trustees, or the reasons for not making the effort.
(d) If a derivative action is successful, in whole or in part, or if
anything is received by a business trust as a result of a judgment, compromise
or settlement of any such action, the Court may award the plaintiff reasonable
expenses, including reasonable attorney's fees. If anything is so received by
the plaintiff, the Court shall make such award of plaintiff's expenses payable
out of those proceeds and direct plaintiff to remit to the business trust the
remainder thereof, and if those proceeds are insufficient to reimburse
plaintiff's reasonable expenses, the Court may direct that any such award of
plaintiff's expenses or a portion thereof be paid by the business trust.
(e) A beneficial owner's right to bring a derivative action may be subject
to such additional standards and restrictions, if any, as are set forth in the
governing instrument of the business trust, including, without limitation, the
requirement that beneficial owners owning a specified beneficial interest in the
business trust join in the bringing of the derivative action.
s 3817 Indemnification.
(a) Subject to such standards and restrictions, if any, as are set forth in
the governing instrument of a business trust, a business trust shall have the
power to indemnify and hold harmless any trustee or beneficial owner or other
person from and against any and all claims and demands whatsoever.
(b) The absence of a provision for indemnity in the governing instrument of
a business trust shall not be construed to deprive any trustee or beneficial
owner or other person of any right to indemnity which is otherwise available to
such person under the laws of this State.
s 3818 Reserved power of State to amend or repeal chapter.
All provisions of this chapter may be altered from time to time or repealed
and all rights of business trusts, trustees, beneficial owners and other persons
are subject to this reservation.
s 3819 Construction and application of chapter and governing instrument.
(a) The rule that statutes in derogation of the common law are to be
strictly construed shall have no application to this chapter.
10
(b) It is the policy of this chapter to give maximum effect to the
principle of freedom of contract and to the enforceability of governing
instruments.
s 3820 Short title.
This chapter may be cited as the "Delaware Business Trust Act."
11
DELAWARE 1996 SESSION LAWS
SECOND REGULAR SESSION OF THE 138TH GENERAL ASSEMBLY
Ch. 548
S.B. No. 332
BUSINESS TRUSTS--GENERAL AMENDMENTS
AN ACT TO AMEND CHAPTER 38, TITLE 12 OF THE DELAWARE CODE RELATING TO
BUSINESS TRUSTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
-- DE ST TI 12 s 3801 --
Section 1. Amend s 3801(a), Title 12 of the Delaware Code by deleting the
words "trust instrument" in clause (i) thereof and substituting in lieu thereof
the words "governing instrument".
Section 2. Amend s 3801(f), Title 12 of the Delaware Code by deleting the
word "and" as it appears at the end of paragraph (1) thereof; by deleting the
"." as it appears at the end of paragraph (2) thereof and substituting in lieu
thereof "; and"; and by adding a new paragraph (3) to read as follows:
-- DE ST TI 12 s 3801 --
"(3) may contain any provision that is not inconsistent with law or with
the information contained in the certificate of trust."
Section 3. Amend s 3803, Title 12 of the Delaware Code by adding a new
subsection (d) thereto to read as follows:
-- DE ST TI 12 s 3803 --
"(d) No obligation of a beneficial owner or trustee of a business trust to
the business trust arising under the governing instrument or a separate
agreement in writing, and no note, instrument or other writing evidencing any
such obligation of a beneficial owner or trustee, shall be subject to the
defense of usury, and no beneficial owner or trustee shall interpose the defense
of usury with respect to any such obligation in any action."
Section 4. Amend s 3804(g), Title 12 of the Delaware Code by adding a new
sentence thereto to read as follows:
-- DE ST TI 12 s 3804 --
"The Court of Chancery shall have jurisdiction over business trusts to the
same extent as it has jurisdiction over common law trusts formed under the laws
of the State of Delaware."
Section 5. Amend s 3808, Title 12 of the Delaware Code by adding new
subsections (c) through (e) thereto to read as follows:
-- DE ST TI 12 s 3808 --
"(c) In the event that a business trust does not have perpetual existence,
a business trust is dissolved and its affairs shall be wound up at the time or
upon the happening of events specified in the governing instrument.
(d) Upon dissolution of a business trust and until the filing of a
certificate of cancellation as provided in s 3810 of this Chapter, the persons
who under the governing instrument of the business trust are responsible for
winding up the business trust's affairs may, in the name of, and for and on
behalf of, the business trust, prosecute and defend suits, whether civil,
criminal or administrative, gradually settle and close the business trust
business, dispose of and convey the
12
business trust property, discharge or make reasonable provision for the
business trust liabilities, and distribute to the beneficial owners any
remaining assets of the business trust.
(e) A business trust which has dissolved shall pay or make reasonable
provision to pay all claims and obligations, including all contingent,
conditional or unmatured claims and obligations, known to the business trust and
all claims and obligations which are known to the business trust but for which
the identity of the claimant is unknown. If there are sufficient assets, such
claims and obligations shall be paid in full and any such provision for payment
shall be made in full. If there are insufficient assets, such claims and
obligations shall be paid or provided for according to their priority and, among
claims and obligations of equal priority, ratably to the extent of assets
available therefor. Unless otherwise provided in the governing instrument of a
business trust, any remaining assets shall be distributed to the beneficial
owners. Any person, including any trustee, who under the governing instrument
of the business trust is responsible for winding up a business trust's affairs
who has complied with this subsection shall not be personally liable to the
claimants of the dissolved business trust by reason of such person's actions in
winding up the business trust."
Section 6. Amend s 3810(a), Title 12 of the Delaware Code by redesignating
paragraph "(2)" thereof as paragraph "(3)" thereof and by adding a new paragraph
(2) to read as follows:
-- DE ST TI 12 s 3810 --
"(2) A business trust is formed at the time of the filing of the initial
certificate of trust in the Office of the Secretary of State or at any later
date or time specified in the certificate of trust if, in either case, there has
been substantial compliance with the requirements of this section."
-- DE ST TI 12 s 3809 --
Section 7. Amend s 3809, Title 12 of the Delaware Code by deleting the
words "for purposes of taxation under Title 30 of this Code" and substituting in
lieu thereof the words "for purposes of any tax imposed by this State or any
instrumentality, agency or political subdivision of this State."
Section 8. Amend s 3810(b)(2), Title 12 of the Delaware Code by striking
the first sentence of said subsection in its entirety and substituting in lieu
thereof a new sentence to read as follows:
-- DE ST TI 12 s 3810 --
"Except to the extent otherwise provided in the certificate of trust or in
the governing instrument of a business trust, a certificate of trust may be
amended at any time for any purpose as the trustees may determine."
Section 9. Amend s 3810, Title 12 of the Delaware Code by adding new
subsections (e) and (f) thereto to read as follows:
-- DE ST TI 12 s 3810 --
"(e) Whenever any certificate authorized to be filed with the Office of the
Secretary of State under any provision of this Chapter has been so filed and is
an inaccurate record of the action therein referred to, or was defectively or
erroneously executed, such certificate may be corrected by filing with the
Office of the Secretary of State a certificate of correction of such
certificate. The certificate of correction shall specify the inaccuracy or
defect to be corrected, shall set forth the portion of the certificate in
corrected form and shall be executed and filed as required by this Chapter. In
lieu of filing a certificate of correction the certificate may be corrected by
filing with the Office of the Secretary of State a corrected certificate which
shall be executed and filed in accordance with this Chapter. The corrected
certificate shall be specifically designated as such in its heading, shall
specify the inaccuracy or defect to be corrected, and shall set forth the entire
certificate in corrected form. The corrected certificate shall be effective as
of the date the original certificate was filed, except as to those persons who
are substantially and adversely affected by the corrections, and as to those
persons the corrected certificate shall be effective from the filing date.
(f) If any certificate filed in accordance with this Chapter provides for a
future effective date or time and if the transaction is terminated or amended to
change the future effective date or time prior to the future effective date or
time, the certificate shall be terminated or amended by the filing, prior to the
future effective date or time set forth in such original certificate, of a
certificate of termination or amendment of the original certificate, executed
and filed in
13
accordance with this Chapter, which shall identify the original certificate
which has been terminated or amended and shall state that the original
certificate has been terminated or amended."
-- DE ST TI 12 s 3811 --
Section 10. Amend s 3811(a)(2), Title 12 of the Delaware Code by adding
after the words "A certificate of amendment" the words ", a certificate of
correction, a certificate of termination or amendment, and a restated
certificate of trust".
-- DE ST TI 12 s 3811 --
Section 11. Amend s 3811(a)(4), Title 12 of the Delaware Code by adding at
four places in said subsection immediately following the words "certificate of
merger or consolidation", the words "or certificate of termination or amendment
of a merger or consolidation".
Section 12. Amend s 3811, Title 12 of the Delaware Code by redesignating
subsection "(b)" thereof as subsection "(c)" thereof and by adding new
subsection (b) thereto, to read as follows:
-- DE ST TI 12 s 3811 --
"(b) Unless otherwise provided in the governing instrument, any person may
sign any certificate or amendment thereof or enter into a governing instrument
or amendment thereof by any agent, including any attorney-in-fact. An
authorization, including a power of attorney, to sign any certificate or
amendment thereof or to enter into a governing instrument or amendment thereof
need not be in writing, need not be sworn to, verified or acknowledged, and need
not be filed in the Office of the Secretary of State, but if in writing, must be
retained by the business trust or a trustee or other person authorized to manage
the business and affairs of the business trust."
Section 13. Amend s 3812, Title 12 of the Delaware Code by striking said
section in its entirety and substituting in lieu thereof a new section to read
as follows:
-- DE ST TI 12 s 3812 --
"s 3812. Filing of certificate
(a) Any certificate authorized to be filed with the Office of the Secretary
of State under any provision of this Chapter (or any judicial decree of
amendment or cancellation) shall be delivered to the Office of the Secretary of
State for filing. A person who executes a certificate as an agent or fiduciary
need not exhibit evidence of his authority as a prerequisite to filing. Unless
the Secretary of State finds that any certificate does not conform to law, upon
receipt of all filing fees required by law he shall:
(1) Certify that the certificate (or any judicial decree of amendment or
cancellation) has been filed in his office by endorsing upon the filed
certificate (or judicial decree) the word "Filed", and the date and hour of the
filing. This endorsement is conclusive of the date and time of its filing in
the absence of actual fraud;
(2) File and index the endorsed certificate (or judicial decree); and
(3) Prepare and return to the person who filed it or his representative a
copy of the filed certificate (or judicial decree), similarly endorsed, and
shall certify such copy as a true copy of the filed certificate (or judicial
decree).
(b) Upon the filing of a certificate of trust in the Office of the
Secretary of State, or upon the future effective date or time of a certificate
of trust as provided for therein, the certificate of trust shall be effective.
Upon the filing of a certificate of amendment (or judicial decree of amendment),
certificate of correction, corrected certificate, or restated certificate in the
Office of the Secretary of State, or upon the future effective date or time of a
certificate of amendment (or judicial decree of amendment) or restated
certificate as provided for therein, the certificate of trust shall be amended
or restated as set forth therein. Upon the filing of a certificate of
cancellation (or a judicial decree thereof) or a certificate of merger or
consolidation which acts as a certificate of cancellation in the Office of the
Secretary of State, or upon the future effective date or time of a certificate
of cancellation (or a judicial decree thereof) or a certificate of merger or
consolidation which acts as a certificate of cancellation, as provided for
therein, the certificate of trust shall be canceled.
14
Upon the filing of a certificate of termination or amendment, the original
certificate identified in the certificate of termination or amendment shall
be terminated or amended, as the case may be.
(c) A fee as set forth in s 3813(a)(2) of this Title shall be paid at the
time of the filing of a certificate of trust, a certificate of amendment, a
certificate of correction, a corrected certificate, a certificate of termination
or amendment, a certificate of cancellation, a certificate of merger or
consolidation or a restated certificate.
(d) A fee as set forth in s 3813(a)(3) of this Title shall be paid for a
certified copy of any certificate on file as provided for by this Chapter, and a
fee as set forth in s 3813(a)(4) of this Title shall be paid for each page
copied.
(e) Any signature on any certificate authorized to be filed with the
Secretary of State under any provision of this Chapter may be a facsimile, a
conformed signature or an electronically transmitted signature. Any such
certificate may be filed by telecopy, fax or similar electronic transmission;
provided, however, that the Secretary of State shall have no obligation to
accept such filing if such certificate is illegible or otherwise unsuitable for
processing.
(f) The fact that a certificate of trust is on file in the Office of the
Secretary of State is notice that the entity formed in connection with the
filing of the certificate of trust is a business trust formed under the laws of
the State of Delaware and is notice of all other facts set forth therein which
are required to be set forth in a certificate of trust by s 3810(a)(1) and (2)
of this Title and is notice of the limitation on liability of a series of a
business trust which is permitted to be set forth in a certificate of trust by s
3804(a) of this Title."
-- DE ST TI 12 s 3813 --
Section 14. Amend s 3813(a)(2), title 12 of the Delaware Code by adding
after the word "consolidation", the words "a certificate of correction, a
corrected certificate, a certificate of termination or amendment or a restated
certificate".
Section 15. Amend s 3815, Title 12 of the Delaware Code by adding a new
subsection (h) thereto to read as follows:
-- DE ST TI 12 s 3815 --
"(h) A governing instrument or an agreement of merger or consolidation may
provide that contractual appraisal rights with respect to a beneficial interest
or another interest in a business trust shall be available for any class or
group of beneficial owners or beneficial interests in connection with any
amendment of a governing instrument, any merger or consolidation in which the
business trust is a constituent party to the merger or consolidation, or the
sale of all or substantially all of the business trust's assets. The Court of
Chancery shall have jurisdiction to hear and determine any matter relating to
any such appraisal rights."
Section 16. Amend ss 3818, 3819 and 3820, Title 12 of the Delaware Code by
redesignating said sections as ss 3820, 3821 and 3822 and by adding new ss 3818
and 3819 to read as follows:
-- DE ST TI 12 s 3818, 3819, 3820 --
-- DE ST TI 12 s 3820, 3821, 3822 --
-- DE ST TI 12 s 3818 --
"s 3818. Treasury interests
Except to the extent otherwise provided in the governing instrument of a
business trust, a business trust may acquire, by purchase, redemption, or
otherwise, any beneficial interest in the business trust held by a beneficial
owner of the business trust. Except to the extent otherwise provided in the
governing instrument of a business trust, any such interest so acquired by a
business trust shall be deemed canceled.
-- DE ST TI 12 s 3819 --
s 3819. Access to and confidentiality of information; records
15
(a) Except to the extent otherwise provided in the governing instrument of
a business trust, each beneficial owner of a business trust has the right,
subject to such reasonable standards (including standards governing what
information and documents are to be furnished at what time and location and at
whose expense) as may be established by the trustees, to obtain from the
business trust from time to time upon reasonable demand for any purpose
reasonably related to the beneficial owner's interest as a beneficial owner of
the business trust:
(1) A copy of the governing instrument and certificate of trust and all
amendments thereto, together with copies of any written powers of attorney
pursuant to which the governing instrument and any certificate and any
amendments thereto have been executed;
(2) A current list of the name and last known business, residence or
mailing address of each beneficial owner and trustee;
(3) Information regarding the business and financial condition of the
business trust; and
(4) Other information regarding the affairs of the business trust as is
just and reasonable.
(b) Except to the extent otherwise provided in the governing instrument of
a business trust, each trustee shall have the right to examine all the
information described in subsection (a) of this section for any purpose
reasonably related to his position as a trustee.
(c) Except to the extent otherwise provided in the governing instrument of
a business trust, the trustees of a business trust shall have the right to keep
confidential from the beneficial owners, for such period of time as the trustees
deem reasonable, any information that the trustees reasonably believe to be in
the nature of trade secrets or other information the disclosure of which the
trustees in good faith believe is not in the best interest of the business trust
or could damage the business trust or its business or which the business trust
is required by law or by agreement with a third party to keep confidential.
(d) A business trust may maintain its records in other than a written form
if such form is capable of conversion into a written form within a reasonable
time.
(e) Any demand by a beneficial owner or trustee under this section shall be
in writing and shall state the purpose of such demand."
SYNOPSIS
Section 1. The purpose of this section is to clarify that the agreement
pursuant to which a business trust is created is its governing instrument, as
that term is defined in the Act.
Section 2. The purpose of this section is to allow a certain degree of
predictability for third parties dealing with a business trust, if the trustees
and the beneficial owners so desire. This section is consistent with the common
law principle that third parties' dealings with a business trust may be based on
contractual consent as to matters stated in its governing instrument. See e.g.
Pennsylvania Co. for Insurance on Lives and Granting Annuities v. Wallace, 31
A.2d 71, 80 (Pa.Supr.1943).
Section 3. The purpose of this section is to provide that the defense of
usury is not available with respect to an obligation of a beneficial owner or
trustee of a business trust to the business trust.
Section 4. This section confirms that the Court of Chancery has
jurisdiction over business trusts and any contested matters relating to the
internal affairs of a business trust, the rights, duties and liabilities of its
trustees and beneficial owners or the interpretation of its governing
instrument.
Section 5. This section clarifies the procedures for the dissolution and
termination of a business trust, including the discharge of claims.
Section 6. This section clarifies the time upon which a business trust is
formed.
Section 7. This section eliminates an ambiguity in existing law by making
it clear that the classification of a Delaware business trust for federal income
tax purposes will govern its classification for not only any tax imposed by this
State but also any tax imposed by any instrumentality, agency or political
subdivision of this State.
Section 8. The purpose of this section is to avoid circumvention by
trustees of limitations on their powers contained in the certificate of trust or
in the governing instrument.
Section 9. This section provides for the use of a certificate of correction
and corresponds to similar provisions found in the laws governing other Delaware
entities.
Section 10 through 14. These sections make various technical corrections to
the filing and execution provisions of the Act and correspond to similar
provisions found in the laws governing other Delaware entities.
16
Section 15. This section clarifies that the beneficial owners are permitted
to be granted contractual appraisal rights with respect to their beneficial
interests in a business trust upon a merger or consolidation and other similar
transactions.
Section 16. This section adds new provisions to the Act dealing with
treasury interests and access to information by beneficial owners of a business
trust.
Approved July 18, 1996.
17